Oil Shocks, Venezuela, Apple, 5G, Silicon Valley, Exuberance, Google, Cruising
Marc Ross Daily
August 7, 2018
Curation and commentary from Marc A. Ross
Reporting from Alexandria, Virginia
Marc Ross Daily = Business News at the Intersection of Global Politics + Policy + Profits
Subscribe here: https://goo.gl/bSQKwA
TOP TEN
✔️ Oil shocks changed the auto industry; tariffs could change it again
✔️ More than 1 million people have left Venezuela since 2015
✔️ Apple could be used as a 'bargaining chip' in the trade war
✔️ 5G Coming to India by 2022
✔️ Trump's ever-changing reasons for tariffs
✔️ How ‘hackers, founders, and freaks’ built Silicon Valley
✔️ Don’t dismiss the humble acquaintance
✔️ "Enthusiasm. Energy. Exuberance.”
✔️ Google increases its foothold into America's daily routines
✔️ Cruising is a $126 billion industry with plenty of room to grow.
MR IN THE NEWS
US-China commercial relations: Last night I spoke with Elaine Reyes (CGTN America - China 24) on the state of US-China commercial relations, tariffs, global supply chains, Election 2018, Apple, and Starbucks. You can watch the clip here: https://youtu.be/F9HOdE5UfhY
GEOECONOMICS
Oil shocks changed the auto industry; tariffs could change it again: To understand why auto tariffs are such a contentious issue today, it helps to go back to the 1970s—with US carmakers dominating the country’s auto market, Japan’s export growth on the horizon, and impending conflict in the Middle East. https://on.wsj.com/2Mo6YMl
@AFP: #BREAKING Brazil closes border to Venezuelans after mass crossings: official
More than 1 million people have left Venezuela since 2015.
Chile has become the first South American country to legally ban the widespread commercial use of plastic bags.
France overheating: France has been forced to shut down four nuclear reactors to stop them overheating as temperatures across Europe soar.
Scottish nationalism akin to a religion, Judge Frances Eccles rules: The Times reports, support for Scottish independence is a philosophical belief akin to a religion, a judge has ruled. Judge Frances Eccles said that believing in a separate Scottish state should be protected under equality laws. She was ruling on a case brought by Chris McEleny, the Scottish National Party group leader on Inverclyde council, who claims that the Ministry of Defence, his employer, unfairly targeted him because of his support for independence.
China will endure: China is prepared to endure a protracted trade war with the US. that is designed to “crush” its economic sovereignty and force it to become “a US economic vassal,” state media has said. Bloomberg reports that the editorial in the nationalist Global Times was published two days after Beijing released details of tariffs ranging from 5 to 25 percent that will be levied on 5,207 kinds of imports from America.
CNBC: Apple could be used as a 'bargaining chip' in the trade war, Chinese state media warns
"Apple has benefited from cheap labor and strong supply chain in China which has helped it boost profit and get to a $1 trillion valuation, the state-backed People's Daily said."
AP: China tightens controls to slow currency’s fall
The Philippines announces a $100 million digital financial hub in Northern Luzon region - known as Crypto Valley of Asia, the area hopes to attract crypto startups and other fintech firms.
Bloomberg: 5G coming to India by 2022 after pit stops in Korea, China
Since 2015, China has outspent the US by $24 billion in 5G infrastructure, potentially creating a "tsunami" that will be difficult to catch up with, according to a new study by Deloitte.
AMERICAN POLITICS
Today: Primaries in Kansas, Michigan, Missouri,, and Washington plus a special election in Ohio (OH-12).
LAT: For years, Richard Gates was at Paul Manafort's side. On Monday, he began testifying against him
CNN: West Virginia to introduce mobile phone voting for midterm elections
Chinese smartphones: The DNC warned Democrats running in the upcoming midterm elections not to use products produced by Chinese tech firms ZTE or Huawei after learning that a Democratic organization was considering purchasing ZTE phones for its staff.
Senators: US should push IMF over China economic expansion: Roll Call reports, a bipartisan group of senators is calling on the Trump administration to counter China's economic expansion as the lawmakers fear that Beijing plans to leverage its foreign investments and lending for infrastructure projects into strategic military footholds.
Observer: How to win a trade war? A group of 200 CEOs havea few ideas for Trump http://bit.ly/2M6N9fA
"Last week, the Business Roundtable (BRT), a multi-industry group consisting of 200 CEOs of America’s largest companies, published a memo with recommendations of what the Trump administration should pursue in the trade negotiation with China."
Weekly Standard: Trump's ever-changing reasons for tariffs https://tws.io/2M8GfXf
California wildfires: The Mendocino Fire Complex exploded in size over the weekend to become the state's 2nd-largest on record — behind last year's Thomas Fire - scorching more than 283,000 acres in 11 days.
How Americans get their news: Gallup and Knight Foundation’s 2017 Survey on Trust, Media and Democracy http://bit.ly/2OR0yXN
- The only media outlets preferred by Republicans over Democrats are Fox, Fox Business and Breitbart.
- Most entertainment outlets listed, like Comedy Central, HBOandMTV, are much more widely favored by Democrats.
ENTERPRISE
Big Four target Asia: The Big Four accountancy firms are expanding in Asia, threatening the ascendancy of established law firms in one of the world’s most important markets, Law.com reports. KPMG, Ernst & Young, Deloitte and PricewaterhouseCoopers are launching new ventures or expanding existing legal offerings in Hong Kong and Singapore, by recruiting new staff and competing with local firms for profitable legal work in fields such as mergers and acquisitions, regulation and capital markets.
Thomas Cook, the man, organized his first trip in 1841, and the travel company that bears his name is still going.
MoviePass will now limit customers to three movies per month. The old policy: One movie per day.
#WhoCares
SoftBank plans to launch a $5 billion Asia fund, half of which will go to Indian startups.
Bloomberg: Google welcome in China if it obeys laws, state media says
Airbnb for Work is now being used by 700,000 businesses, nearly tripling April 2017's total of 250,000 clients.
Facebook has asked large US banks to share their customers' detailed financial information as part of an effort to offer new services to the social media platform's users
Peloton aspires to be as big and well-known as the NordicTrack and has cracked the holy grail of subscription media.
WeWork has hired ex-Salesforce and AppDynamics exec Kendall Collins to oversee its technology as it continues to grow its “Powered by We” business, through which it helps companies redesign and even manage their offices.
Blooms Business Club = a London coworking space offers a “female-first” collaborative atmosphere
The Verge: T-Mobile launches a cheaper unlimited phone plan for just the 'essentials'
KFC has a new Colonel Sanders = George Costanza
Uber’s India based rival, Ola, is headed to Europe.
Tesla has begun hiring for its new Shanghai factory.
‘NewTV’ startup closes $1 billion, all major studios among investors: Variety reports, Jeffrey Katzenberg and Meg Whitman have successfully sold Hollywood on their ambitious plans to create a kind of next-generation HBO or Netflix — with bite-size original programming designed for smartphones. Now the question is whether their “NewTV” venture will deliver something consumers will actually pay for.
MV = Mobile Video
TRENDS
Chinese cars top auto sales in Chile: Chinese-made cars for the first time topped auto sales in Chile in the first half of the year.
Voice powered purchasing: Only two percent of Amazon Alexa users have bought anything using their voice in 2018.
Whenever I find an Alexa in a friend's home, I promptly place orders for snowmobiles, air conditioners, jelly beans, and bubble bath soap. It's funny when all this stuff arrives unexpectedly.
Hearables: The explosive growth of their AI voice assistants has Google, Apple, and Amazon racing to put your entire smartphone in an earpiece.
Audio = Huge
Shenzhen: The Silicon Valley of Hardware (documentary) http://bit.ly/2MoCgm4
Cruising is a $126 billion industry with plenty of room to grow. The Cruise Lines International Association says that only about 20 percent of Americans have taken cruises, and the number is smaller for Europeans and smaller still for Asians.
Google is in talks with Tencent and Inspur to bring its cloud business to China.
@THRGlobal: Disney’s #ChristopherRobin won't get China release due to a crackdown on the Winnie the Pooh character
Attention economy: Google’s YouTube, Google and Waze combined to account for 34.2% of all time on digital media in June, according to Pivotal Research analyst Brian Wieser.
Google increases its foothold into America's daily routines - it's all about routine and habits.
CULTURE
Enthusiasm. Energy. Exuberance.” -- Tom Peters
@SBNation: LeBron will produce a documentary series for Showtime called 'Shut Up and Dribble,' according to @Variety
The Atlantic: How to make friends, according to sciencehttp://bit.ly/2M7j935
To begin, don’t dismiss the humble acquaintance.
@AdamMGrant: On average, it takes 50 hours of interaction to go from acquaintance to friend and 200 hours to get to close friend.
Real friendships rarely happen overnight. They build over time through sharing moments of joy and moments of heartache.
PODCAST
How ‘hackers, founders, and freaks’ built Silicon Valley: Recode Decode guest Adam Fisher’s new oral history is called “Valley of Genius: The Uncensored History of Silicon Valley.” http://bit.ly/2M5VmAI
So not about adoptions....
So not about adoptions....
Marc Ross Daily
August 6, 2018
Curation and commentary from Marc A. Ross
Reporting from Alexandria, Virginia
Marc Ross Daily = Business News at the Intersection of Global Politics + Policy + Profits
Subscribe here: https://goo.gl/bSQKwA
TOP FIVE
✔️ Saudi Arabia said it has expelled Canada’s ambassador
✔️ Drone attack failed to President Nicolás Maduro of Venezuela
✔️ China deploys huge police force to prevent fraud protest
✔️ Trump admitted, on the record, that he misled the American people
✔️ Boston-area startups are on pace to overtake NYC venture totals
ROSS RANT
Can you do it 3x times a day?
I am moving towards checking email 3x a day, but working as a comms/public affairs/ thought leadership operative I find this to be a challenge as my job requires to be on and able to respond to news developments and press requests in hyper-timely fashion.
But clearly email is a hot mess, and old technology and a total time suck — new thinking and new application of this tool are needed.
Any ideas, please share via email.
GEOECONOMICS
KSA v CAN: Saudi Arabia said it has expelled Canada’s ambassador in the kingdom and recalled its own envoy from Ottowa after Canada expressed concern over recent arrests of civil-society and women’s rights activists in the kingdom.
Drone assassination plot: Venezuelan authorities said they arrested six suspects tied to an alleged plan to assassinate President Nicolás Maduro. The drone attack that failed to kill Maduro of unfolded on live TV and in front of many witnesses.
Russia diplomacy: Steven Seagal was appointed by the Russian Foreign Ministry as a special representative to improve relations with the US.
Quake: An earthquake in Indonesia killed more than 90 people.
Nikkei: India becomes battlefield for Chinese smartphone makers
China depletes its ammunition belt with latest tariff threat: Nikkei reports, China has threatened new tariffs on $60 billion in American products amid signs of Xi running out of options as pressure on him to act mounts in a particularly sensitive political season. The inclusion of American liquefied natural gas in the top tier for an additional 25% of duties shows just how badly relations have deteriorated since Trump's visit to Beijing last November.
China deploys huge police force to prevent fraud protest: AFP reports, hundreds of police patrolled the streets of Beijing's financial district Monday as Chinese authorities clamped down on a planned protest against losses sustained in risky peer-to-peer (P2P) lending platforms. Enraged over financial losses, petitioners told AFP they had come from every corner of China -- from the southernmost province of Guangdong to the far-west region of Xinjiang -- in hopes that by gathering en masse, the government would recognise their grievances and take action.
China meets Trump’s tariff hardball with pledge to endure: Bloomberg reports, China is prepared for a “protracted war” and doesn’t fear sacrificing short-term economic interests, according to an editorial in the nationalist Global Times on Sunday evening. “Considering the unreasonable U.S. demands, a trade war is an act that aims to crush China’s economic sovereignty, trying to force China to be a US economic vassal.”
OTD: In 1806 the Holy Roman Empire was formally dissolved.
No-deal risk: Prime Minister Theresa May’s ministers are ratcheting up warnings of Britain crashing out of the European Union without a deal. And they’re blaming Brussels, which Trade Secretary Liam Fox says is putting ideology over the “economic well-being of the people of Europe.”
AMERICAN POLITICS
NYT: Dirt on Clinton was focus of ’16 meeting, Trump admits
Trump said that a June 2016 meeting in Trump Tower between campaign aides and a Kremlin-connected lawyer was designed to “get information on an opponent.”
Oh really?!?
Trump admitted, on the record, that he misled the American people about the infamous Russia meeting in Trump Tower.
Trump says 2016 Russian meeting was related to Clinton: FT reports, President’s tweets clash with initial explanations over why his son had met with lawyer.
Executive time: Trump is on a working vacation in Bedminster, NJ, through August 13.
Colbert King: Follow the Russian money, and tighten your seatbelt https://wapo.st/2MmjXhD
Poll: Democratic congressional aides surveyed by CQ Roll Call last month said the party should replace Nancy Pelosi as leader whether Democrats win a House majority in November or not.
OH-12: Tomorrow's special House election in Ohio is huge - at least for political junkies as a tool to sort out what might happen this fall.
Republican Troy Balderson will face off against Democrat Danny O'Connor for a solidly red House seat.
The RNC has opened two offices in the district, launched a $500,000-plus get-out-the-vote effort, and dispatched one of its top officials, Bob Paduchik, who ran Trump's 2016 Ohio campaign.
Columbus Dispatch: Balderson won't address Kasich claim he did not invite Trump to central Ohio
GOP grumbles as Donald Trump reshapes midterm campaigns: AP reports, President Donald Trump’s strategy of becoming aggressively involved in the midterm elections is prompting concern among some Republicans who worry he’s complicating the political calculus for GOP candidates trying to outrun his popularity. Those Republicans worry their statewide candidates may rise or fall based on Trump’s standing, muddling their path to maintain control of Congress.
Bankruptcy booms for older Americans: The rate of people 65 and older filing for bankruptcy is three times what it was in 1991. The shrinking of the social safety net includes longer waits for full Social Security benefits, the replacement of employer-provided pensions with 401(k) savings plans and more out-of-pocket spending on health care.
Chicago Tribune: In less than 7 hours, 40 shot, 4 fatally as violence rips Chicago
Privacy legislation: US tech companies are hoping to get ahead of the public and legal fallout by working with policymakers to help shape potential new federal privacy legislation.
NYT: Steel giants tied to Trump block tariff relief for other firms
Nucor and United States Steel, both with deep ties to Trump administration officials, have used veto power over other companies, forcing them to buy their products instead of steel from abroad.
Team Trump picking the winners and losers of the economy.
Tax cuts working for big business: America’s biggest companies are reporting some of the strongest earnings growth since the recession, boosted by lowered tax rates and a robust US economy that is fueling demand.
ENTERPRISE
Indra Nooyi: PepsiCo’s longtime leader will step aside as chief executive. Nooyi serves on the board of directors of the US-China Business Council and is easily one of the world's best CEOs.
Meet PepsiCo’s next CEO: Ramon Laguarta: He is a native of Barcelona who speaks English, Spanish, French, German, Greek and Catalan. He has an MBA from Spain’s ESADE business school and worked at Chupa Chups SA, a candy company based in Spain, before joining PepsiCo in 1996.
Didi Chuxing Technology Co. will invest $1 billion in its auto-services business - vehicle leasing, refueling and car-maintenance programs - as it seeks to expand beyond ride-hailing in the world’s biggest automotive market.
Disneyflix: What some in Hollywood are calling the streaming service that Disney plans to introduce next year.
Samsung will introduce a new Galaxy Note phone.
Roots is opening locations in Georgetown and Pentagon City Mall next week.
Strayer Inc. officially completed its $1.9 billion merger with Minneapolis-based online education giant Capella Education Co.
TRENDS
The $300 million plan to farm salmon in the middle of the ocean: Bloomberg reports, the semi-submersible Ocean Farm 1 off the coast of Norway can hold 1.5 million fish.
Boston-area startups are on pace to overtake NYC venture totals: TechCrunch reports, after years of trailing New York City in total annual venture investment, Massachusetts is taking the lead in 2018. Venture investment in the Boston metro area hit $5.2 billion so far this year, on track to be the highest annual total in years. The Massachusetts numbers year-to-date are about 15 percent higher than the New York City total.
China produces 50% of the world’s cannabis: Most of its crop is non-psychotropic hemp, used for fabrics, medicine, and recreation.
9 astronauts: Nine NASA astronauts — five of whom flew on the space shuttle — have been announced as the crew of new commercial spacecrafts built by Boeing and SpaceX. Beginning next year, these crafts will head toward the International Space Station in the first manned missions from the U.S. since the shuttle program ended seven years ago.
Omega-3 supplements: A $15 billion industry that is growing at an annual rate of 7 percent. However, an analysis of 79 studies with an aggregate 100,000 participants found omega-3 consumption has little or no effect on promoting heart health.
CULTURE
AP: French master chef Joel Robuchon dies at 73
Robuchon reached a total of 32 Michelin stars in 2016 — a record— and still held 31 stars this year, including five three-star restaurants.
He started a revolution with his "Atelier" — workshop in French — model: small, intimate restaurants where diners sat at a counter surrounding the kitchen. It didn't take reservations and it didn't have tables.
SPORT
Fore: Georgia Hall, a 22-year-old Englishwoman, won the Women’s British Open, her first major golf title.
LAT: Cheer, cheer for the Banana Slugs? Earwigs? Prune Packers? California teams go nuts on sports nicknameshttps://lat.ms/2MnQd3L
Track and field: The European Athletics Championships begin at the Olympiastadion in Berlin.
Manchester United have opened talks with Bayern Munich over the potential signing of Jérôme Boateng.
Manchester City beat Chelsea 2-0 to win the Community Shield in an ominous performance for the rest of the Premier League.
ATP top 10:
1. Rafael Nadal (ESP)
2. Roger Federer (SUI)
3. Alexander Zverev (GER)
4. Juan Martin del Potro (ARG)
5. Grigor Dimitrov (BUL) 4610
6. Kevin Anderson (RSA) 4355
7. Marin Cilic (CRO)
8. Dominic Thiem (AUT)
9. John Isner (USA)
10. Novak Djokovic (SRB)
Sure China is a competitor but it's also a marketplace
Much of the press coverage on the current state of US-China commercial relations is focused on competition, and not enough on the market for American goods and services.
China as a competitor has been dominating press headlines for years. Candidates seeking high office in the United States have been informing voters that China is a competitor and the only solution is tough action. Political columnists use China to score easy points and advance one-sided protectionist remedies.
Years of one-sided opinion is having a negative impact on US-China commercial relations and is fostering a tit-for-tat retaliatory tariff environment.
In the United States, negative views of China have increased by 26 percentage points between 2006 and 2016. And American negativity towards China has been higher than Chinese negativity toward the United States in every year since 2014.
A January 2017 Pew Research survey of Americans found that 65 percent of respondents said China is either an adversary (22 percent) or a serious problem (43 percent), while only about a third (31 percent) said China is not an issue.
And in a separate Spring 2016 survey by Pew Research, a majority (55 percent) of Americans held an unfavorable opinion of what more and more Americans see as their largest Asian rival.
This hostile environment is the public affairs reality that American business is facing right now.
Many now see China, one of America's most significant and most promising markets, as a loser for US business. Unfortunately, this belief is fertile ground for politicians supporting protectionist policies and trade halting tariffs. Actions that if successfully passed would force Beijing to respond with retaliatory trade tactics including increased limits stifling full access to the growing Chinese consumer marketplace for American goods and services.
It is time for those that care about a productive and engaged US-China commercial relationship to take these polls seriously and engage Americans in Main Street coffee shops and at picnic tables for backyard BBQs.
For far too long American business has overly relied on a model dependent on high-level government relationships and support from the White House and corresponding federal agencies to manage the US-China relationship.
This model to manage the US-China relationship is exhausted and broken.
US companies exported $135 billion in goods to China in 2017, and it is still the third-largest US goods export market behind Canada and Mexico, our neighbors and NAFTA partners.
Thirty states experienced at least triple-digit goods export growth to China since 2006, and four states saw growth of more than 500 percent over the same period: Alabama, Montana, North Dakota, and South Carolina. Every US state had triple-digit services export growth to China since 2006, 16 states had export growth of more than 400 percent.
At a grassroots level, it is critical to remind Americans US goods and services exported to China come from a wide range of industries. Goods such as transportation equipment, agriculture products, computers and electronics, and chemicals. These exports also sustain logistics jobs in America’s ports and warehouses throughout the country. Also, US services exports come from the travel, education, and transportation sectors as well as professional business and financial services.
Leaders of American business needs to play a decisive role in reversing this trend and ensuring American goods and services reach the ever-expanding Chinese marketplace. Sitting on the sidelines will be too detrimental for America's economic security.
- Marc A. Ross
Marc A. Ross is the founder of Caracal Global and specializes in global communications, thought leader management, and event production at the intersection of international politics, policy, and profits. Working with senior executives from multinational corporations, trade associations, and disruptive startups, Marc helps business leaders navigate globalization, disruption, and politics.